Vestis (VSTS) Delivers Its First Real Pricing Win

Vestis (VSTS) reported its first quarter as a public company, marking a turning point for the company in its quest to prove profitability. Adjusted EBITDA rose to $81 million, a 23% increase year-over-year, while revenue per pound increased for the first time since the company separated from Aramark. Revenue per pound reached $1.42, up $0.04 year-over-year and $0.05 sequentially.

This improvement is attributed to disciplined pricing, better customer segmentation, and a shift away from lower-margin linen volume. The company also reduced its lowest-performing volume by about 22 million pounds and cut costs, resulting in a net income of $11 million and a full-year free cash flow guidance of $160 million to $170 million.

Despite revenue shrinking and debt reduction being modest, the company's pricing and mix strategy appears to be working, indicating that Vestis is in the midst of a mid-turnaround rather than a finished transformation.